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FINTECHS & CORONA; WHICH FINTECH WILL GROW IN POST CORONA ERA by GÖRKEM ÇOKÇETİN

  1. 1. FINTECHS & CORONA; WHICH FINTECH WILL GROW IN POST CORONA ERA GORKEM COKCETIN-SEEED
  2. 2. ABOUT ME  20 years versatile banking experience in 4 different countries and 4 different banks  12 years in Corporate banking with different roles in branch, region and head office level with sales, marketing and product development, product management experience  8 years Innovation and Fintech experience recently Head of Fintech Engagement and Partnerships in Emirates NBD  Manage, participate and contribute to many projects in digital banking , digital transformation, open banking, product development and CRM  Corporate trainer on innovation and creative thinking , start-up mentor on business model generation  Senior Advisor for EFMA on fintech engagements and advisor for 2 FinTechs 23.04.2020
  3. 3. OVERVIEW OF FINTECH ECO-SYSTEM BEFORE CORONA • Q3 2019 was the largest quarter by volume $12.5 billion without any single deal over $500 Million • Middle East and Africa represent only %2 of 2019 volume by $769 Million 23.04.2020
  4. 4. MENA – FINTECH SECTOR IN 2018-2019 • %13 of all deals in 2018 and 2019 YTD attributable to FinTech, • FinTech ranks only 4th by total funding with saturation in the e- commerce and logistics industries, • FinTech has now surpassed all other industries by number of deals since 2018 • In total, 127 MENA-based FinTech startups have raised funding and 2 FinTechs undergone IPO 23.04.2020
  5. 5. IS CORONA A BLACK SWAN OR THE NEW NORMAL? 23.04.2020
  6. 6. MAIN DRIVERS SHAPE THE POST CORONA ERA FOR FINTECHS COVID-19 has had an inconceivable impact on all of our lives and is reframing our way of life on a daily basis. Never before have we seen such a drastic and immediate impact across businesses in multiple sectors.  Governments are committing $ trillions to help enterprises, SME’s and employees, the need for finance management has never been more important.  There will be a huge liquidity almost with zero interest but the main battle ground will be keeping the businesses running , protect the households wealth and ensure supply and demand with using the incumbent finance system still not ready for a rapid change (opportunity for Fintechs)  The crisis will lead to fundamental shifts in how we work, how we spend, how we interact in private and business context.  The financial data models becoming obsolete and still not know what will be the new ones  Cash will be «dirty» and e-money (digital Money) will be the king, digital combine with physical will become a must  The crisis will result in a revisit of how investors and potential buyers perceive value, with some verticals expected to see a wake-up call , while others embrace opportunities of the recession might bring along
  7. 7. OVERVIEW OF FINTECH SECTORS WHICH WILL GROW Business (Mainly SMEs) • SMS lending – mostly for working capital • Supply chain management & finance • Digital Business Banks (Challenger or bank-owned) • Digital & physical integration Households • Wallets & PFM • Digital payments and check-outs • On-demand and digital insurance • Chat bots Enablers • Eco-system play • Digital Identity (Onboarding, e-signature and notarization) • Fraud prevention & secure payments, • Blockchain • AI and big data
  8. 8. DEMAND AND REGULATIONS MATRIX Customer Demand EasofRegulations E-payments & Check-outs Digital Banks Wallets Digital IdentitySME Lending Supply Chain Management Chatbots AI &Big Data On-Demand Insuarance PFM Fraud Prevention Blockchain Low Mid High Competion Level Investment Level HighLow High High Consumer Lending
  9. 9. The customer base will increase but incumbents will join. Generating revenue is will become harder FIN-TECH During Crisis Post Crisis Interchange and FX revenue collapse but chances for acquiring new customers by stimulus packages Digital payments are increasing but high losses in transaction volumes and revues Short term FX solutions to counter volatility Volatility is the best friends of trade De-risking and fund withdraw Need for funding, high risk of defaulters Defaults are big risk, FinTechs can play an important role in stimulus packages (Square, Paypal Venmo) Re-Mortgage to get disposable income. Shift to online The end of cash is near, digital payments will boost but travel sector will reduce the revenues Focus from incumbents to drive consolidation Free brokerage has attracted millions of new customers Pressure on fees, robo-advisory will rise Old school lending will merge with FinTechs Reseccion loans to grow the books. New lending facilities with attractive pricing Accelerated shift to digital disruption Revenue Decline Mild Increase High Increase
  10. 10. Not immune to crisis. Not a «digital gold» yet Never a better time to automate Chat bot army already mobilizes Work from Home shows the vulnerabilities Not a focus now, foucus is on keep business continuity Defults are up, tech is the last thing on the mind Partnerships to fast track rescue packages New innitiatives or on hold, pressure on fees Very low trade, very low remittances Crypto based wallets and credit cards is a need. Crypto based rewards. CB Backed Crypto Currencies RPA will be on the rise. SMEs are shouting for more Call centers start optimizing, Bot solutions combined with agents and virtual agents will be the key E-Identity will become norm with digital KYC Fraud prevention is key. Lending and mortgage breakthroughs are on the way Supply chain management and financing will grow but the risk appetite will be low Challenges to update API standards Re-Mortgage to get disposable income. Shift to online, enable felxiable investment options No major push to new alliances FIN-TECH During Crisis Post Crisis Revenue Decline Mild Increase High Increase
  11. 11. MACRO ECONOMIC IMPACT: RECOVERY TO A NEW NORMAL STARTING IN Q3 2020 23.04.2020 Till now to 2020-Q3 Crisis 2020-Q3&Q4 Recovery (Stabilization) 2021-Q1&Q2 New normal
  12. 12. CLOSING REMARKS ABOUT NEW NORMAL  «Digital or die» will be the motto for every sector, who adapts the digital faster will survive  Review of what is really essential to stay physical and which can be digitalize  Focus on combing digital with physical especially in your vertical  If you already have a fintech & start-up with customer base probably you will see more investors knocking at your door in Q3, but don not expect previous valuations 23.04.2020

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FINTECHS & CORONA; WHICH FINTECH WILL GROW IN POST CORONA ERA by GÖRKEM ÇOKÇETİN

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